- The Washington Times - Tuesday, January 8, 2002

DETROIT As many as 20,000 jobs are expected to be cut when Ford Motor Co. announces a massive restructuring program Friday.
Ford officials said yesterday there would be some reductions in the work force but wouldn't say how many cuts there would be. They said the plan is to increase manufacturing flexibility while reducing capacity and renewing focus on developing high quality products.
Ford Chief Operating Officer Nick Scheele called analyst estimates of job cuts "guesses."
"We're not going to respond to what external people say you must do or not do," he said at the North American International Auto Show.
On Sunday, Chairman and CEO William Clay Ford Jr. told reporters at the show that Ford "can't cost-cut our way out" of its slump. "The turnaround will be driven by great products."
Some analysts have predicted that up to 20,000 jobs will be eliminated to help the company become profitable again.
"It should be relatively dramatic, and I would say if I had to ballpark on the high end, I'd say 20,000. I think 15,000 to 20,000 is where it should be," said Kevin Tynan, an auto analyst with Argus Research in New York. "Where it winds up is another story all together."
Mr. Scheele said the restructuring plan would be global and include operations in Japan.
However, both Mr. Scheele and North American operations chief Jim Padilla said there would be some job reductions that could be accomplished largely through attri
tion.
"We have the capabilities to move people. There's the possibility of buyouts," Mr. Padilla said.
Ford's shares fell 44 cents, or 2.6 percent, to $16.50 on the New York Stock Exchange.
Ford plans to release its fourth-quarter financial report next week.
The automaker said last month that it expected a loss of 50 cents per share for the last three months of 2001. Analysts had been expecting a loss of 14 cents a share for the quarter and some said the company's loan policies led to trouble.
Last week, Ford reported its U.S.-vehicles sales dropped 6 percent in 2001 from 2000.
Ford like the rest of the industry has excess manufacturing capacity, Mr. Padilla said.
But that doesn't mean the No. 2 automaker will cut product programs to save money in the short term, Mr. Scheele said Sunday.
He said the company's contract with the United Auto Workers union forbids wholesale plant closings but that the company would be working with the UAW on the local level as it attempts to reduce manufacturing capacity.
Just how much capacity will be reduced will be decided at this week's board meeting, he said.
Mr. Scheele said the restructuring would look at more flexibility in the manufacturing process to make better use of assembly plants.
David Littmann, chief economist for Comerica Bank, estimates Ford will have to cut between 7 percent and 12 percent of the work force.


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